Figures show US recession is ending
The US economy has returned to growth after a prolonged period of shrinkage in the first official sign the recession may finally be over.
An advance estimate of gross domestic product (GDP) by the Bureau of Economic Analysis suggests US output expanded at an annual rate of 3.5% in the third quarter. But it may be too early to start celebrating, experts suggest.
Next week, US employment figures are expected to show that people are still losing jobs, while many are predicting home repossessions will continue to rise.
The positive growth recorded in the third quarter is the result of a mix of government spending, increased exports and a upward tick in personal consumption, the Bureau said.
It ends a negative run that lasted for four previous quarters, representing one of the longest recessions ever recorded in the US. The Bureau stressed that the “advance” estimate is based on incomplete data that is subject to revision.
As such many will wait until second estimates are released on November 24 before officially declaring the recession over.
But the return to growth is likely to be seized upon by supporters of the administration as proof that President Barack Obama's stimulus package has been central to turning the economy around.
President Obama welcomed the figures but said the US was still a “long way” from recovering from the “deepest downturn since the Great Depression”.
Joblessness in the US is hovering at around 9.8% and experts suggest it will get worse before American job queues dwindle.
Invest Northern Ireland welcomed signs the US economy is on the up. Bill Montgomery, Invest NI's director of international investment, said: “As our largest source of inward investment and a significant export market for our companies, the health of the US economy impacts on our local economy.
“Clearly, any sustained recovery which helps to restore the confidence of business to invest, will be beneficial as we continue to target high quality inward investment and build on recent successes such as those from NYSE Euronext and Navinet.”
NYSE recently announced it will create 400 new jobs in Belfast while Navinet has promised 60 high-tech positions.